Putting Salaries Into Perspective

theory in practice

In this off-season, the fate of various hockey players will be determined. The first interesting case is that of Jaromir Jagr, the talented and explosive Czech who essentially disappeared in the post-season. Jagr is a $10 million player. He could command far more.

He could make a bad team good and a good one extraordinary; he was fortunate to learn from the great Mario Lemieux before he retired. With Lemieux gone, Jagr became the premier player but faded in the playoffs when Lemieux returned.

Ironically, Lemieux is the team's owner. It is his call to decide whether Jagr will get his $10 million and remain in a Pens' uniform. What makes this tricky is that Lemieux may play a couple of years, but then what? He needs a successor. But what becomes trickier is that the Pens must sign 5 other talented free agents. Last year, the Pens' entire payroll was at $30 million — Jagr represented almost a third. If the Pens wish to keep the 5 players, that $10 million would make a big difference.

So what should they do? Jagr himself has admitted that the smart thing to do would be to let him go and get some young talent in exchange, while freeing up some room in the payroll. My verdict: do not expect the Czech to be in a Pens' uniform next year.

canuck vs. swede in colorado

Things are getting interesting in Colorado, the Avs are in the Stanley Cup finals and Ray Bourque may finally get his shot at drinking out of Lord Stanley. But in the off-season, questions will be raised on whether or not the Avs should (or can) sign both their marquee players, 2-way wonder Peter Forsberg and probable MVP Joe Sakic.

Both players are in the $10 million league, so signing both is almost impossible. And while Ray Bourque may want to pay the players' salaries himself if the Avs can win the Cup, chances are the team will let one player go... but which one? Depends on whether they win Lord Stanley or not.

$ponsorship$

Most inquiries on salaries arise over salaries only, but these days, the bulk of a player's total compensation is the value of sponsorships. Consider this to be the equivalent of the long-term compensation of a CEO, whose long-term gains will only be truly realized provided he does his job and creates value. Well, an athlete must not only create value, but also generate goodwill for advertisers to want to attach themselves.

When everything is said and done, athletes are employees, and if an employer wants to keep them happy, they must show them the proper respect, in both material and non-material ways. Which brings us to the interesting predicament over at HBO, which happens to be the employer of Lennox Lewis.

Lewis' recent loss in the ring came as a "shock" to the HBO executives. Interesting, since HBO will benefit far more in the long-term thanks to Lewis' loss. After Tyson bites Rahman out of the ring, and walks away with the championship, a Tyson-Lewis clash will make all of these players' salaries look like minimum wage.

And now for the answer to this week's trivia question:

Question: Which team was Pedro Martinez's first in MLB?

Answer: The Los Angeles Dodgers took an interest in Ramon's younger brother, Pedro. But they shipped him to the Montreal Expos for Delino Deshields. The rest, as they say, is history.